YEAGER v. STATE, 500 So.2d 1260 (Ala.Crim.App. 1986)

"did knowingly obtain, by deception, control over money, the property of D.E. Ponder, Jr., of the value of, to-wit: $147,000.00, with the intent to deprive the owner of said property, by representing to the said D.E. Ponder, Jr. that she had purchase orders for $147,000.00, of Amagift Albums from West Point Pepperell, said representation being false, in violation of §13A-8-3of the Code of Alabama."

"It was a rollover situation. He was merely taking the profit or being told he was getting certain profits on a transaction. And, when those profits and the principal were to be paid to him, there was other transactions that these monies were rolled over into rather than going through a burdensome paper trail of writing checks back and forth. So, he normally rolled over the profit."

"My obligation to Yeager was not to get ninety-four thousand dollars from the bank and put them in a box and save it and give it to her. My obligation was to furnish her ninety-four thousand dollars on Friday. . . . And, when Friday came, I wired her one hundred and forty-seven thousand dollars. Of which ninety-four thousand dollars was to go against that contract and the balance of which was to go to various contracts that I don't, I cannot tell you specifically which contracts, because we did not go into depth."

"[She said] there was no reason that any other Amway person who became aware of it, there was no reason why they couldn't do the same thing. And therefore, didn't need to tell anybody, because there was no reason they couldn't do the same thing."

"For instance, one company that she had told me she was very close to making a sale was Republic Bank in Dallas. At the last minute, she said she lost that sale because someone in the bank who realized that they were fixing to pay one hundred thousand dollars purchase or whatever, a large purchase, realized that his secretary or his wife would do the same thing. So, why pay Yeager the profit? Hey, I will let my wife or secretary do it. And, she came back and said this is an example of the secrecy problem. We don't want the people in the company to necessarily know, because there was no reason why Bill Lane, if he started getting ___ because, there was no reason to arouse his suspicion that hey, I can do this myself. And, the secrecy thing was played over and over."

"And, you know, she kind of really hit hard. You know, that is very important. Because, the person that I heard it from could do the same sale myself or for herself. But, you know, we've got a niche. We are able to sell these to companies, but anybody can do it. So, it is important that we not tell anybody."

"And, there were other instances where the secrecy was just hit over and over.

And, I discussed this secrecy with Paul Fields, my accountant, with Larry Bolden, with my attorney. And, it was, I mean we discussed it over and over. And we all concluded that it was a legitimate reason for the secrecy."

"[W]ell, no attorney said don't check out the purchase orders. But my attorneys were familiar with it, were aware of it, were comfortable with it and were comfortable enough to put some of their own money in it."

"Like I said, to me, when an attorney says you know, this is a great deal you have got going and I want to put fifty thousand dollars in it, that is about as much assurance as you can get from an attorney that everything is all right."

"Houston Financial Group was a limited partnership which was formed to receive capital or funds to advance to Main Place Financial Group. And then Main Place Financial Group actually advanced those funds to Mr. Ponder."

"And as a practical proposition the deposit slip is the mere instrumentality through which the depositor acquires the use of the money.

"Indeed inCity National Bank v. Burns,68 Ala. 267, 44 Am.Rep. 138, the holding was that the act of the bank in crediting a depositor with the amount of a check drawn upon it by another customer, is 'equivalent to a payment in money'.

"It would be carrying technicality to a most regrettable extreme to hold that the proof of the mere instrumentality of obtaining the money constitutes a variance with the charge of obtaining the money itself, when the same evidence discloses the fact that the money was so obtained. Counsel for defendant lays stress upon two decisions of this Court."

"Courts are established for practical purposes and should function with a practical end in view. One of the outstanding values of a bank is the matter of safety to the depositor of his money, and, of course, the 'deposit slip' but evidences the fact, for all practical purposes, that the depositor has so much funds in the bank subject to immediate use.

"It was, in the instant case, merely the instrumentality through which the defendant received his money, and to hold a fatal variance in such a case would run counter to common sense and tend to frustrate the practical end, for the accomplishment of which courts were established."Simmons v. State,242 Ala. 105,106,4 So.2d 905(1941).

"REQUESTED JURY CHARGE NO. 23 "Ladies and Gentlemen of the jury I charge you that if you believe from the evidence that Dan E. Ponder, Jr., hadprior knowledge of the falsityof the representations made by Vicky Yeager, if she did make representations, or if a reasonably prudent person who exercised ordinary care would have discovered the true facts, you should find Vicky Yeager not guilty. (86 So.2d 418)"

"REQUESTED JURY CHARGE NO. 24 "Ladies and Gentlemen of the jury I charge you that if you believe from the evidence that Dan E. Ponder, Jr., hadprior knowledge of the falsityof representations made by Vicky Yeager, if she did make representations, or if the circumstances surrounding the pronouncement of these representations would have aroused suspicion as to its validity in the mind of a reasonable person, he cannot be said to have reasonably relied and you should find Vicky Yeager not guilty. (393 So.2d 1016)"

"Because it is the policy of courts not only to discourage fraud but also to discourage negligence and inattention to one's own interests, the right of reliance comes with a concomitant duty on the part of the plaintiffs to exercise somePage 1268measure of precaution to safeguard their interests. In order to recover for misrepresentation, the plaintiffs' reliance must, therefore, have been reasonable under the circumstances. If the circumstances are such that a reasonably prudent person who exercised ordinary care would have discovered the true facts the plaintiffs should not recover.Bedwell Lumber Co.v. T T Corporation,386 So.2d 413,415(Ala. 1980).

" 'If the purchaser blindly trusts, where he should not, and closes his eyes where ordinary diligence requires him to see, he is willingly deceived, and the maxim applies,"volunti non fitinjuria".'

"Although a plaintiff alleged to have been injured by a defendant's misrepresentation must have in fact acted upon it to his injury believing it to be true to maintain his action for fraud against the defendant, if he had prior knowledge of its falsity or if the circumstances surrounding the pronouncement of same would have aroused suspicion as to its validity in the mind of a reasonable person, he cannot be said to have reasonably relied upon the misrepresentation and, therefore, cannot obtain damages or other relief from defendant. SeeShahan v. Brown,167 Ala. 534,52 So. 737(1910);Mid-State Homes, Inc. v. Holt,52 Ala. App. 415,293 So.2d 476(1974)."

"If a party upon exercising reasonable care would have discovered the facts or have had reason to doubt the truth of the representation, the plaintiff should not recover.Torres v. State FarmFire Casualty Co.,438 So.2d 757,759(Ala. 1983);Bedwell Lumber Co. v. T T Corp.,386 So.2d 413(Ala. 1980). If a plaintiff has knowledge or notice of certain facts which would excite inquiry or surrounding circumstances which would have aroused suspicion in the mind of a reasonable person, a plaintiff cannot be said to have relied upon a misrepresentation and cannot recover.Village Toyota, 433 So.2d [1150] at 1154 [Ala. 1983]."

"In this case, while we agree that a purchaser should not 'close his eyes where ordinary diligence requires him to see,'Torres, supra,438 So.2d 757(citingMunroe v. Pritchett,16 Ala. 785,789(1849)), we nevertheless cannot allow a seller of land to induce the purchase by misrepresenting facts he knew to be false. Accordingly, we affirm."

"The fact that the party to whom the representations are made may have discovered the truth by investigation is immaterial where he is fraudulently induced to forgo making inquiries or investigations, in whole or in part, which he otherwise would make, where the representations are of such a character or are made in such a way as to disarm his vigilance, lull his suspicions, and induce him to refrain from making such inquiries or examinations, or where, by trick or artifice, he is prevented by the other party from making such an examination." 37 Am.Jur.2dFraud and Deceit§ 258 (1968).

"A false pretense, to be indictable, must be calculated to deceive and defraud. As of an actionable misrepresentation, it must be of a material fact, on which the party to whom it is made, has the right to rely; not the mere expression of an opinion, and not of facts open to his present observation, and in reference to which, if he observed, he could obtain correct knowledge.Whether the prosecutor could haveavoided imposition from the false pretense, if hehad exercised ordinary prudence and discretion todetect its falsity, is not a material inquiry. As ageneral rule, if the pretense is not of itselfabsurd or irrational, or if he had not at the verytime it was made and acted on, the means at hand ofdetecting its falsehood, if he was really imposedon, his want of prudence is not a defense.. . . The prosecutor had a right to rely on the representation, and there was no obligation or duty to the prisoner to inquire into its truth, or whether he was dealing fairly and honestly."Woodbury v. State,69 Ala. 242,245-46(1881) (emphasis added).

"The former general false pretense statute punished anyone 'who, by false pretense or token and with the intent to injure or defraud, obtain[ed] from another any money or other personal property.' Code 1975, § 13-3-90. In applying the statute, the courts read a reliance requirement into the law. The pretense itself must be a material one, furnishing an inducing, controlling motive for the victim in parting with his property,Ex parte Thaggard,276 Ala. 117,159 So.2d 820(1963), though it need not be the sole or exclusive cause for the loss.Franklin v. State,44 Ala. App. 521,214 So.2d 924(1968).The fact thatthe victim was not diligent, but imprudent will notnegate his reliance if the misrepresentation wouldhave caused a reasonably prudent person to act.Elmore v. State,138 Ala. 50,35 So. 25(1903). The gist of the offense is the deception imposed upon the victim's confidence which causes him to intend to part with his property (title) without a fair opportunityPage 1270to bargain. SeeCarlisle v. State,76 Ala. 75(1884)."Ex parte Day,481 So.2d 1169,1171(Ala. 1985) (emphasis added).

"From the evidence above referred to it was open to the jury to find that the loan was made in reliance on verbal misrepresentations of the defendant as to his ownership of cotton and as to the character of the paper labeled 'Round Bale Ticket,' and that the misrepresentations by themselves, or together with the general appearance of the paper, were such as might have caused one in the exercise of reasonable prudence to lend the money without careful inspection of the paper. Hence the question of defendant's guilt did not necessarily depend on whether Blank used diligence to inform himself of the character of that paper, as is assumed by charge 1."Elmore, 35 So. at 26.

"Conceding arguendo, but not deciding, that presentation of the check to the drawee was an implied representation that defendant had funds on deposit or credit in the amount of the check, we are nevertheless of opinion that, under the stated facts, the Court of Appeals is not in error in concluding that any representation implied from the check was not an inducement or moving cause which induced the bank to part with its money but that the statement or statements made by the bookkeeper to the teller constituted the inducement which caused the bank to part with the money."Thaggard,276 Ala. at 119,159 So.2d 820.

" 'What is a false pretence, within the meaning of the statute? It may be defined to be a representation of some fact or circumstance, calculated to mislead, which is not true. To give it a criminal character there must be ascienterand a fraudulent intent. Although the language of the statute is very broad, and in a loose and general sense, would extend to every misrepresentation, however absurd or irrational or however easily detected; yet we think the true principles of construction render some restriction indispensable to its proper application to the principles of criminal law and to the advantageous execution of the statute. We do not mean to say that it is limited to cases against which ordinary skill and diligence cannot guard; for one of its principal objects is to protect the weak and credulous from the wiles and stratagems of the artful and cunning; but there must be some limit, and it would seem to be unreasonable to extend it to those who having the means in their own hands, neglect to protect themselves. It may be difficult to draw a precise line of discrimination applicable to every possible contingency, and we think it safer to leave it to be fixed in each case as it may occur. 2 East's P.C. 828;Young v. The King, 3 T.R. 98.

" 'It is not the policy of the law to punish criminally mere private wrongs. And the statute may not regard naked lies, as false pretences. It requires some artifice, some deceptive contrivance, which will be likely to mislead a person or throw him off his guard. He may be weak and confiding and his very imbecility and credulity should receive all practical protection. But it would be inexpedient and unwise to regard every private fraud as a legal crime. It would be better for society to leave them to civil remedies. Roscoe on Crim.Ev. (2d ed.) 419; Goodhall's case, Russ. Ryan, 461.'"Thaggard,42 Ala. App. 233-34,159 So.2d 813, quotingDrew.

" 'It is not necessary that the injured party should have conducted an investigation as to the falsity of the pretense toPage 1272make it an offense. 25 C.J. 598, 599, section 26.State v. Starr,244 Mo. 161,148 S.W. 862;State v.Donaldson,243 Mo. 460,148 S.W. 79. But it is the victim's duty to avail himself of the means of detection at hand at the very time to determine the truth or falsity of the accused's representations.' "Thaggard,42 Ala. App. at 235,159 So.2d 813, quotingHerman.

"Some of the early cases held that the crime was not committed if the misrepresentation would not have deceived a person of ordinary prudence and intelligence, but this is quite unsound. The social interest in safeguarding the individual against fraud includes the individual who is not well equipped to protect himself as well as one better endowed by nature. Hence the accepted view today is that this requirement is satisfied if the misrepresentation was made with intent to deceive and did actually deceive, even though a more intelligent person would not have been misled by this type of fraud." R. Perkins and R. Boyce,Criminal Lawp. 378 (3rd ed. 1982).

"In accordance with earlier cases, a false representation qualifies as a false pretense only if it would have deceived a person of ordinary prudence and intelligence. However, under the prevailing view, which recognizes the social reality that the lesser intelligent persons are in greater need of the law's protection than the more intelligent ones, the test is whether the representation deceived the particular person to whom it was made, not whether it would have deceived a person of ordinary prudence and intelligence.

"A similar conflict of authority exists in respect of the victim's negligence in allowing himself to be deceived. Under one view, the victim's negligence in relying upon the false representation precludes criminal liability, particularly where the victim had equal means of knowing or ascertaining the truth. Under the better view, a defendant who intends to defraud another by means of a false representation and who as a result obtains his money or property will not be heard to claim that the victim was negligent in believing him." C. Torcia, 3Wharton's Criminal Law§ 429 (14th ed. 1980).

"Generally, the guilt of one charged with obtaining money or property by false pretenses does not depend on whether the victim could, with reasonable diligence or ordinary prudence, have ascertained that the representations were false. In other words, one who has made false representations cannot excuse himself by saying that if the victim was sharp, diligent, and astute, he could have detected the fraud by using means of detection available to him."

"The general rule has been qualified in some cases by the proposition that the want of prudence on the part of the victim in failing to make further investigation as to the truth of a representation made to him is not a defense to a criminal prosecution for obtaining money or property by false pretenses 'if the representation is not of itself absurd or irrational.'"

"One to whom a false pretense is made, if the pretense is calculated to deceive, is not required to investigate independently the truth of it in order to make the accused liable, since the guilt of the accused 'does not depend upon whether the victim could, with reasonable diligence, have ascertained that the representations were false.'"